According to the IRS, in 2008 the average sentence for tax fraud was 28 months in prison. County statistics were not available.

Tax preparation fraud

Hromoko said in the last four to five weeks many people are rushing to get their taxes filed on time. Some tax preparers either take a person’s information to steal their identity or make fraudulent claims on returns. Hromoko suggests getting some background or referrals for a preparer. Contacting the Better Business Bureau is also a good way to find out about a preparer, he said.

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“Make sure they are trustworthy and they are going to prepare an honest and fair return for you,” he said.

If a preparer falsifies information, the blame lies on the taxpayer, with identify theft being an exception. Even if a return is being filed electronically, taxpayers should ask to see a copy before it is submitted.

One way a preparer could find more money for a client is filing a Schedule C form, which means the person is self-employed. Self-employed individuals can deduct many more expenses, he said. Another way to receive more money from the government is adding additional dependents on a return.

The court system has been handing out jail time for preparers who try to take advantage of the system. Ella Alloway of Waterford, owner of Alloway Tax Service, was sentenced to 21 months in prison for preparing 50 fraudulent federal tax returns.

Some tax preparers will back up a client if they are audited by the IRS, but not all are qualified to appear in court on a client’s behalf.

People who deliberately file inaccurate tax returns can also face jail time. SCI-Pittsburgh inmate George Brooks had three months added to his prison sentence after stealing Social Security numbers from other inmates and filing returns using their information. His girlfriend set up addresses where she could collect the checks. The girlfriend, Edna Gorham-Bey, received a 15-month sentence for helping to facilitate the scheme.

Employment tax fraud

Even if a taxpayer prepares an honest return, an employer could harm a taxpayer by breaking the law. If an employer does not pay unemployment, Medicare or Social Security taxes, the services would not be available to the taxpayer.

“The IRS-Criminal Investigation Division takes these violations of law very seriously,” he said. “This type of fraud can also impact employees, who may see future benefits such as Social Security, Medicare or unemployment compensation reduced or eliminated because of their employers not complying with the law.”

Hromoko said some young people who enter the work force fall victim to an employer wanting to pay them cash. When they get laid off, they try to collect unemployment, but money had never been paid on their behalf. Others go to retire, but cannot receive Social Security. Once people realize they cannot collect unemployment, they report their employer. But there is a catch. Even if a person is considered a contractor and paid cash, they still need to file a tax return and pay taxes. So if the person didn’t pay, they are in the wrong as well.

“They’re 22 to 23, 19 to 20, and starting out their life with tax issues,” he said.

Some employers take the taxes from an employee’s paycheck, but don’t forward the money to the government.

Hromoko said residents from Somerset and Cambria counties have reported they received an e-mail scam stating that they are to receive an additional refund. The e-mail appears to come from IRS and even has official logos.

“It looks pretty legit,” he said.

The e-mail tells taxpayers that they are eligible for a $63.80 return and has a link where a person can enter their Social Security number and bank account information for the money to be transferred.

“About an hour later your bank account is wiped out,” he said.

Since the amount of money is low, some people believe it is legitimate, Hromoko said.

“The IRS never, ever sends out an e-mail asking you for your bank and personal identifying information,” he said. “Typically the IRS do not converse by e-mail.”